Sunoco Logistics Partners reports earnings for fourth quarter 2011

Sunoco Logistics Partners L.P. (NYSE: SXL) on Jan. 26 announced net income attributable to owners for the fourth quarter 2011 of $76 million ($0.60 per unit diluted), compared with $59 million ($0.47 per unit diluted) for the fourth quarter 2010.

Net income for the fourth quarter 2011 includes a $42 million charge to impair certain assets and account for regulatory obligations associated with the Partnership's assets which could be negatively impacted by Sunoco, Inc.'s announced exit from its refining operations. Excluding the charge, the Partnership had net income of $118 million ($0.99 per unit diluted).

Highlights of the fourth quarter and full year 2011 include:

-- Adjusted EBITDA for the quarter rose to a record level of $165 million and $544 million for the full year

-- Record distributable cash flow of $110 million for the quarter and $388 million for the full year

-- Continued to focus on growth: $665 million of expansion capital spending, including major acquisitions

-- Completed a three-for-one unit split on Dec. 2, 2011

"The Partnership had a record year in 2011," said Lynn L. Elsenhans, chairman and chief executive officer. "The West Texas crude oil market and developing shale production areas provided many opportunities for us to optimize our assets to generate additional cash flow. In addition, we continue to grow our ratable business which was up 14 percent year over year. 2011 expansion capital was $665 million, including $494 million of major acquisitions. Our acquisitions and organic projects over the past year are in alignment with our goal of creating long-term, sustainable growth."

In looking towards expectations for the future, Elsenhans said, "Our Mariner West project with MarkWest Energy to deliver ethane to Canada is under way. This project is backed by long-term shipper commitments and is expected to be operational by July 2013. We continue to develop our West Texas crude expansion project, which is expected to be on-line in the first quarter of 2013. For 2012, we plan to increase organic capital spending to approximately $300 million in order to capture more value from existing assets such as Eagle Point, Nederland and our patented butane blending technology, as well as Mariner West and the West Texas crude expansion."

Magellan Midstream 4th quarter profit rises 25 percent on sales growth

Fourth-quarter earnings at Magellan Midstream Partners LP (NYSE: MMP) rose 25 percent as revenue benefited from high commodity prices and growth projects.

For the year, the company projected per-unit earnings of $3.75, above recent estimates of analysts polled by Thomson Reuters for $3.66.

For the current first quarter 2012, the company forecast per-unit earnings of 98 cents, above analysts' estimates of 90 cents.

Chief Executive Michael Mears said the company expects "the favorable momentum of 2011 to continue with another record year projected for 2012 as additional expansion projects come on line."

For the fourth quarter, Magellan Midstream reported a profit of $110.3 million, or 97 cents a unit, up from $88 million, or 78 cents a unit, a year earlier. Excluding mark-to-market impacts, earnings were $1.02 a share. The company in November forecast 93 cents a share, which was slightly below analysts' views at the time.

Revenue increased 22 percent to $486.9 million. Analysts most recently projected $434 million.

Operating margin eased to 28.7 percent from 28.9 percent amid higher operating and product purchases costs.

Based on progress of expansion programs under way, the company raised its 2012 capital spending forecast to $430 million from its November view for $270 million.

Magellan also raised its 2013 estimate to $90 million to complete the projects, from $65 million as it continues to pursue expansion opportunities.

Copano increases presence in Eagle Ford Shale with DK pipeline expansion

HOUSTON, Texas - Copano Energy, L.L.C. (Nasdaq: CPNO) on Feb. 9 announced that it will extend its wholly-owned 96-mile, 24-inch DK Pipeline in the Eagle Ford Shale play by adding approximately 65 miles of 24-inch pipeline southwest into McMullen County, Texas, which will allow Copano to access significant new Eagle Ford volumes.

The DK Pipeline extension is expected to begin service in the first half of 2013 and is projected to cost approximately $120 million.

The pipeline extension will follow the same route as Copano's recently announced condensate pipeline, Double Eagle Pipeline LLC, a joint venture with Magellan Midstream Partners, L.P., in the rich gas window of the Eagle Ford Shale.

The extension of the DK Pipeline is supported by a new long-term agreement with Petrohawk Energy Corp., a subsidiary of BHP Billiton. Under the terms of the fee-based agreement, Copano will provide Petrohawk with gathering, processing and NGL handling services for a significant commitment of natural gas volumes from leases in McMullen County, Texas.

"We are pleased that BHP Billiton has selected Copano again as a provider of midstream services for its significant position in the rich gas window of the Eagle Ford Shale," said R. Bruce Northcutt, president and CEO of Copano Energy. "The southwest extension of our DK Pipeline coupled with the Double Eagle condensate pipeline will allow Copano to offer a full slate of gas, NGL and condensate solutions to our customers in the trend."

Marathon Petroleum Corp. considering $6.2 billion IPO for pipeline assets

FINDLAY, Ohio - Marathon Petroleum Corp. (NYSE: MPC), the crude refiner that was spun off from Marathon Oil Corp. (NYSE: MRO) in June, says it is considering an initial public offering for its pipeline assets that may be worth as much as $6.2 billion.

Marathon Petroleum could launch the IPO for its pipeline assets as soon as the second half of 2012 and buy back as much as $2 billion in shares, the company said in a statement on Feb. 1. The announcement came less than two weeks after hedge fund Jana Partners LLC bought a 5.5 percent stake and began talks with the company.

Before Jana Partners began buying shares, Marathon Petroleum's Chief Executive Officer Gary Heminger said the Findlay-based company’s refineries and pipelines shouldn’t be broken up.

The offering would be for units of a master limited partnership, or MLP, the company said.

Marathon Petroleum shares rose 9.6 percent to $41.88 at the close of the stock market on Feb. 1 in New York. The shares traded at a 29 percent premium to the average price of $32.58 Jana paid for its 18.8 million shares, excluding options, according to data compiled by Bloomberg.

CONSOL Energy and MarkWest agree to accelerate natural gas supply

PITTSBURGH, Pa. -- CONSOL Energy Inc. (NYSE: CNX) on Jan. 31 announced that it has amended a previous agreement with MarkWest Energy Partners, LP (NYSE: MWE). 

Under the amendment, CONSOL Energy, through a subsidiary, contracted for the full 200,000 Mcf per day of capacity in MarkWest's Majorsville III plant. This will be in addition to the 30,000 Mcf per day that the company already had under contract in MarkWest's Majorsville II processing plant. 

There are associated agreements covering the fractionation and sale of the NGLs out of MarkWest's Houston, Pa., fractionation and marketing complex. 

At the close of the joint venture agreement between CONSOL Energy and Noble Energy in 2011, these agreements were assigned in part to Noble Energy, but are expected to be split evenly by both companies at the end of January 2012. These agreements will enable Noble Energy to continue its development efforts in the wet gas portion of the joint venture acreage. 

CONSOL Energy anticipates first production from this area in Q2 2012, also representing the company's first production from the wet area of its Marcellus acreage. By year-end 2012, CONSOL Energy and Noble Energy anticipate 20 well completions at Majorsville. 

MarkWest's Majorsville plant sits in the center of the joint venture's Majorsville acreage, keeping gathering cost to a minimum. The residue gas from the plant will initially be sold into long-term firm transportation agreements that CONSOL Energy's subsidiary CNX Gas Company LLC has under contracts on Columbia Transmission and Texas Eastern Pipelines

Cheniere and KOGAS sign 20-year LNG sale and purchase agreement

Cheniere Energy Partners, L.P. (NYSE Amex: CQP) announced on Jan. 30 that its subsidiary, Sabine Pass Liquefaction, LLC, has entered into a liquefied natural gas sale and purchase agreement with Korea Gas Corp. (KOGAS) under which KOGAS has agreed to purchase approximately 3.5 million tons per annum of LNG when Cheniere’s train three begins operations.

Under the SPA, KOGAS will purchase LNG on an FOB basis for a purchase price indexed to the monthly Henry Hub price plus a fixed component. LNG will be loaded onto KOGAS's vessels.

The SPA has a term of 20 years beginning at the first commercial delivery for train three, and an extension option of up to 10 years. Deliveries from train three are expected to occur as early as 2017.

"KOGAS is our fourth foundation customer and we have now sold 16 mtpa of the 18 mtpa being developed at the Sabine Pass LNG terminal," said Charif Souki, chairman and CEO. "We look forward to finalizing all necessary steps in order to begin construction of the first phase of our project early this year and more importantly, to becoming the first LNG exporter in the Continental U.S."

Army Corps submits draft impact statement for Alaska gas ‘bullet’ pipeline

FAIRBANKS, Alaska - The Army Corps of Engineers has submitted a draft Environmental Impact Statement (EIS) to the federal Environmental Protection Agency for a proposed 737-mile gas pipeline from Prudhoe Bay to Cook Inlet.

The small-diameter pipeline, expected to cost $8.4 billion, would be complete by 2019, according to the notice published in the Federal Register on Jan. 20.

The Alaska Stand Alone Pipeline (ASAP) will be a 24-inch pipeline running along the Dalton and Parks highways to the coast. It would run to the west of Fairbanks, with a 12-inch spur line from Dunbar to Fairbanks. 

The plan for the pipeline came about from a legislative directive in 2010, and it  has been called everything from a "bullet line" to a "pencil line," the latter term coming from those who say the diameter is too small.

At first, the line would carry up to 250 million cubic feet per day, about half of its ultimate capacity, the report says. Fairbanks would be supplied with 60 million cubic feet per day